Falco Enters Into an Option Agreement with First Quantum for tailings management

Falco Resources Ltd. has entered into an option agreement with First Quantum Minerals Ltd. pursuant to which First Quantum grants the corporation the sole and exclusive right to acquire an undivided one hundred percent ownership interest in the Norbec and Millenbach sites located in the vicinity of the City of Rouyn-Noranda.

The Properties will serve as the Corporation’s tailings management facilities and are located at a former tailings facility (the old Norbec Mine), which has already been impacted by historical mining activities and is situated approximately 11 km from the Horne 5 Project’s mining complex site. The use of this previously impacted site is consistent with Corporation’s environmental, social and governance strategies as reflected in the Corporation’s recently released Sustainability Report dated May 31, 2021.

TERMS OF THE OPTION AGREEMENT

The Corporation is required to pay $1,000,000 (the “Option Price”) to First Quantum by August 20, 2021, in the form of (i) a cash payment of $500,000 (the “Cash Payment”), and (ii) the issuance of such number of common shares of Falco having an aggregate value of $500,000 (the “Consideration Shares”) based on the volume weighted average trading price of the common shares for the five trading-day period ending as of two business days before the date of the Cash Payment, subject to a minimum price of $0.30 per common share pursuant to the policies of the TSX Venture Exchange (“Exchange”) which results in a maximum of 1,666,667 Consideration Shares issuable under the Option Agreement.

Upon the exercise of the Option by the Corporation, (i) First Quantum will transfer the Properties to the Corporation; (ii) the Corporation will assume historical and contingent environmental liabilities related to the Properties’ former mining site; and (iii) First Quantum will make cash payments to the Corporation representing the reimbursement of the Option Price, together with additional payments totaling $3,500,000 ($500,000 on the date of transfer of the Properties and $1,000,000 at each of the three consecutive anniversaries thereof). The Option is exercisable until December 31, 2022.

First Quantum will retain a 2% net smelter royalty on any production from the area represented by the mining concessions 177 and 517, which form a part of the Properties.

The Option Agreement has been entered into at arm’s length between the parties. It remains subject to Exchange approval with respect to the issuance of the Consideration Shares. All securities issued in connection with the Option Agreement will be subject to a four-month hold period in accordance with applicable securities laws.

About Falco 

Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns approximately 70,000 hectares of land in the Rouyn-Noranda mining camp, which represents 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal asset is the Horne 5 Project located in the former Horne mine that was operated by Noranda (now Glencore Canada Corporation) from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties Ltd’s subsidiary, Osisko Development Corp. is Falco’s largest shareholder owning 18.2% interest.

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